Jersey City will not be able to borrow $9.5 million to pay for costs associated with retiring employees, thanks to the City Council.

The council tonight voted down the city’s request to approve a $9.5 million bond ordinance by a 5-4 vote. It’s the second time in three weeks that the council has rejected the city’s request to borrow the funds.

Jack Kelly, the city’s business administrator, tonight blasted the council for the move, saying taxpayers will now have to cough up $204 more next year since the city will have to pay the $9.5 million outright instead of paying it off over three years.

The city inherited contracts that promised workers would receive accumulated sick-, vacation- and comp-time pay upon retirement, and now those workers have to be paid, Kelly said.

“By voting no on this ordinance you are asking the current taxpayers to shoulder a disproportionate liability created over a generation,” he said.

If the council had approved the bond ordinance, taxpayers would have paid an extra $66 this year and an extra $39 for the next two years, according to the city.

This is the third year in a row the city has planned to borrow to pay for retirement costs. The city has already paid out $6.7 million this year to retiring workers, and could pay nearly $3 million before 2012 ends, city officials have said.

Opponents of the bond ordinance said the city should investigate selling property it owns near the Jersey City Medical Center instead of borrowing yet again. Borrowing for a third year is not fiscally prudent, they said.

“I think if taxes go up, the mayor should be responsible for that,” Lopez said. “He’s been around for eight years.”

Healy said in a statement that any plan to sell the property near JCMC is “fiscally irresponsible” because there’s no guarantee the land will be sold.

Resident Mia Scanga urged the council to adopt changes that would cap terminal-leave payouts. Scanga said such payouts are a “rip-off” of taxpayers.

“Just the thought that I should pay for a sick day that you didn’t take in 1985 at the salary you’re getting now really makes me throw up,” she said.